He warned finance ministers not to try to make Britain responsible for £1bn of loans.

Mr Osborne said: “Britain is not in the euro, so the idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter.”

“The idea that British taxpayers are going to be on the line for this Greek deal is a complete non-starter”

Prime Minister David Cameron declared in 2010 that he had won a "clear and unanimous agreement" that the EFSM would no longer be used to underwrite bailouts of struggling eurozone countries.

Instead, responsibility was supposed to fall only on member states using the single currency under a new permanent mechanism specifically set up to deal with crises like that in Greece.

But the deal was not legally binding and European Commission president Jean-Claude Juncker is reported to be seeking to turn back to the EFSM to help provide Athens with desperately needed cash while a new bailout is agreed.